Configure Third Party Sick Pay Providers

This section describes how to configure third party sick pay providers in Dayforce and define details of the relationship the employer has contracted with their providers.

Before You Begin: This functionality is applicable only for US pay groups.

Third party sick pay providers are configured in Payroll Setup > Third Party Sick Pay Providers. Providers are grouped below two headings that you can expand or collapse: Custom (customer-defined) and System (predefined, non-editable).

After the third party providers are set up in Dayforce, payroll administrators can record the details of employees’ sick pay as an adjustment so that taxes are calculated, remitted, and reported properly.

Considerations

• Before you create sick pay adjustments in Payroll, you must configure applicable earning codes with SICK/DISABILITY PAY selected in the Taxability Type field. More information is available in the topic Tax and Compliance Details for Earnings.
• When configuring third party sick pay providers, you define whether Dayforce or the third party sick pay provider remits the employer and employee tax on the sick pay, as well as who prepares employees’ W-2 forms for sick pay, according to the details of the contracted agreement with the provider.
• Typically, Dayforce remits the employer tax and third party sick pay providers remit what they withhold for the employee from their sick pay; although third party sick pay providers can be set up in Dayforce with either tax being remitted by Dayforce or the third party.
• When you add a record, Dayforce enforces a unique name. Because users see this name in the Adjustments screen of Payroll, this requirement ensures that users can differentiate between options.

To configure third party sick pay providers:

1. Go to Payroll Setup > Third Party Sick Pay Providers.
2. Click Add and enter a name and description.
3. In the Employer Tax Remitter drop-down list, select what organization remits the employer taxes for the sick pay, either the third party or Dayforce.
4. In the Employee Tax Remitter drop-down list, select what organization remits the employee taxes for the sick pay, either the third party or Dayforce.
5. In the W2 Preparer drop-down list, select what organization prepares the W2 forms, either the third party or Dayforce.
6. If the provider is currently being used, select the Active checkbox.
7. (Optional) Enter a reference code.
8. Cross-reference codes are used to export data from Dayforce to other applications. See Cross-Reference Codes.
8. Click Save.